EMERGING MARKETS-Brazil shares, currency drop on local political woes
By Bruno Federowski SAO PAULO, May 23 (Reuters) - Brazil's stocks and currency fell sharply on Monday on reports that a high-ranking minister, in charge of securing legislative support for fiscal austerity measures, had sought to obstruct a sweeping corruption probe. Planning Minister Romero Jucá agreed to a "national pact" to weaken the country's biggest ever corruption investigation known as operation "Car Wash," according to excerpts from taped conversations published by the daily Folha de S. Paulo. Jucá ruled out resigning, saying he supported the investigation centered at state-controlled oil company Petróleo Brasileiro SA . "Opposition lawmakers will seize the opportunity and there is a concrete possibility he will be forced to leave government," said Arlindo Sá, a derivatives broker with Ativa brokerage in São Paulo. "To lose a minister this soon would spell very bad news for this administration's credibility." Interim President Michel Temer's government will face his first major challenge in Congress on Monday in the form of a budget committee vote on whether to allow a record 170.5 billion reais ($47.84 billion) primary deficit this year. Brazil's Finance Minister Henrique Meirelles said the government will announce short- and long-term measures on Tuesday to tackle growing debt and limit spending. Shares of Petrobras fell almost 5 percent, also tracking a decline in oil prices, and weighed on the country's benchmark Bovespa stock index. The move came despite well-received reports that Ivan Monteiro will remain as the company's chief financial officer. The Brazilian real led the losses among Latin American currencies, which weakened on the back of lower commodity prices. The Colombian peso weakened slightly after the country's central bank acted to stem the currency's slump on Friday. Key Latin American stock indexes and currencies at 1435 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 788.92 0.47 -1.12 MSCI LatAm 2061.55 -0.87 13.65 Brazil Bovespa 49206.89 -1.04 13.51 Mexico IPC 45147.79 -0.02 5.05 Chile IPSA 3941.56 0.04 7.10 Chile IGPA 19416.98 0.07 6.97 Argentina MerVal 12619.73 -0.28 8.09 Colombia IGBC 9802.48 0.01 14.68 Venezuela IBC 15466.27 -0.02 6.02 Currencies daily % YTD % change change Latest Brazil real 3.5677 -1.43 10.63 Mexico peso 18.4250 -0.49 -6.49 Chile peso 693.1 -0.23 2.40 Colombia peso 3052.35 -0.11 3.83 Peru sol 3.3389 -0.21 2.25 Argentina peso (interbank) 14.0000 0.29 -7.27 Argentina peso (parallel) 14.62 0.34 -2.39 (Additional reporting by Paula Arend Laier; Editing by Bernadette Baum)
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